STOCK MARKET WATCH, Monday September 15 **THREAD #2**

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday September 15, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 125
DAYS SINCE DEMOCRACY DIED (12/12/00) 2794 DAYS
WHERE'S OSAMA BIN-LADEN? 2519 DAYS
DAYS SINCE ENRON COLLAPSE = 2810
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

U.S. FUTURES &
MARKETS INDICATORS>
NASDAQ FUTURES-----------------------------S&P FUTURES

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

AT THE CLOSING BELL ON September 12, 2008

Dow... 11,421.99 -11.72 (-0.10%)
Nasdaq... 2,261.27 +3.05 (+0.14%)
S&P 500... 1,251.70 +2.65 (+0.21%)
Gold future... 764.50 +19.00 (+2.49%)
30-Year Bond 4.33% +0.11 (+2.66%)
10-Yr Bond... 3.73% +0.11 (+2.98%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [email protected]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. The first SMW thread was overloaded.

Let's see how long this second one lasts.

[DemReadingDU]

7. Thank you ozy!

Busy day

[ozymandius]

9. You're very welcome. n/t

[Hugin]

43. If the Mod's will bear it... It's best practice to start a new thread about every 150 to 200 posts.

To be kind to those DUers who are still lacking broadband.

Quite a sizable number, due to the shenanigans of certain Corporate Providers.

(A topic to cover on a future SMW... )

[Dr.Phool]

64. It took me this long to finish the first one.

I couldn't even get through to some of the links. They must be getting bombarded.

[antigop]

2. GOP platform: "...Republicans advocate lower taxes, reasonable regulation....

http://www.gop.com/2008Platform/Economy.htm

Economic freedom expands the prosperity pie; government can only divide it up. That is why Republicans advocate lower taxes, reasonable regulation, and smaller, smarter government. That agenda translates to more opportunity for more people. It represents the economics of inclusion, the path by which hopes become achievements. It is the way we will reach our goal of enabling everyone to have a chance to own, invest, and build.

And the financial industry has had "reasonable regulation", hasn't it?
:sarcasm:

[ozymandius]

8. I'll repeat my random thought.

How can that hideous Club for Growth sell this shit anymore?

[Roland99]

16. Tax cuts are going to go bye-bye (even Holt-Eakin knows that)

even if they cut spending by a few hundred billion per year (which we all know will be in social programs and not the massive welfare to the military-industrial complex)

[54anickel]

3. OMG check out McCain today in FL - "fundamentals are strong!"

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x190236

:rofl:

[Lebam in LA]

5. The scary part is that his base believes it

Even as they lose houses, can't afford food, gas or medicine they still drink the kool-aid.

[BearSquirrel2]

32. He believes what he is told ...

John McCain's lights went out a couple of years ago. He is in early Alzheimer's and he now just says what he's told to say.

[ozymandius]

6. He really said that?!?

This was not editorial license being used on his comments? Damn! if that's his actual statement. He needs corks in his ears to keep the feces from running out.

[antigop]

11. If he said that, the Obama campaign should use that quote in an ad n/t

[54anickel]

15. It's on youtube, but at a closer look it's not from today - the ticker numbers

at the bottom are all wrong for today. Someone's being a smart-ass by reposting in on youtube today.

http://www.youtube.com/watch?v=igAmVs0cvY8

[Dr.Phool]

66. He is in Florida today.

[54anickel]

146. So what's with the DOW being ticked at -95 - I didn't think it got that high this morning. Damn I

wish they'd have the fricken date on the screen! Don't get me wrong, I really hope the idiot repeated that line today. I just can't believe ANYONE would be that stupid. If he really said this today it's like handing Obama a damned gift.

[54anickel]

153. OMG, it's true - he DID say it again today.......

http://voices.washingtonpost.com/channel-08/2008/09/mccain-palin_ad_says_economy_i.html

"Our economy, I think, is still -- the fundamentals of our economy are strong, but these are very, very difficult times,'' McCain said earlier today in Florida. "I promise you we will never put America in this position again. We will clean up Wall Street.''


http://voices.washingtonpost.com/the-trail/2008/09/15/mccain_fundamentals_of_economy.html

Oh, and check out his new ad....says it's in crisis. So which is it?

http://www.youtube.com/watch?v=pd-pMhboEX4

[54anickel]

22. Union Launches a TV Ad With Focus on the Economy (Great timing!)

http://online.wsj.com/article/SB122144489745534911.html?mod=googlenews_wsj

That's what unions are trying to hammer home as they work to reel in votes from working-class voters for Sen. Barack Obama, who polls better on economic issues than Sen. John McCain.

On Sunday, the Service Employees International Union unveiled an ad featuring a white, working-class family struggling to get by after the husband named Henry lost his job eight months ago. The 30-second ad, which cost $2.1 million, will air in Ohio, Pennsylvania, Michigan, New Mexico, Wisconsin and Iowa.

"We have three kids, I like to send them to school looking nice, you know," says an unnamed woman in the ad. "I work two shifts usually, and we're still behind."

The ad attacks Sen. McCain, quoting him as having said that he still needs "to be educated" about economics and that he said the country is better off today than it was eight years ago. And it rolls a clip of Sen. Obama saying that his proposed tax cut would benefit the middle class three times more than Sen. McCain's plan.

In announcing the ad, Anna Burger, secretary-treasurer of SEIU, said she thought the McCain campaign has tried to distract voters from substantive issues lately and that the ad was an attempt to redirect voters' attention.

more...



The RNC's response.... :cry:
http://www.thepittsburghchannel.com/politics/17471903/detail.html
snip>
Alex Conant, a spokesman for the Republican National Committee, calls the ad misleading and says it is the type of ad that Obama criticized before he began dropping in the polls.

[ozymandius]

4. The Terrible Lessons of Bear Stearns

(excerpting some cutting remarks)

The lesson from the Bear Stearns' bailout -- $29 Billion in Federal Reserve bad paper guarantees -- are quite stark:

• Go Big: Don't just risk your company, risk the entire world of Finance. Modest incompetence is insufficient -- if you merely destroy your own company, you won't get rescued. You have to threaten to bring down the entire global financial system. The fear and disruption caused by a Bear collapse is why it was saved. (AIG has the right idea on this)

...

• Risk an important part of the economy: If your book of derivatives is limited to some obscure and irrelevant portion of the economy, you will not get saved. On the other hand, if Mortgages are important, credit cards and auto loans are too. Securitized widget inventory is not.

....

• Unintended Consequences lurk everywhere: When the Fed opened up the liquidity spigots via its alphabet soup of lending facilities, the fear was of the inflationary impacts. But the bigger issue should have been Complacency. The Dick Fulds of the world said after Bear, these new facilities "put the liquidity issue to rest." Lehman got complacent once liquidity was no longer an issue -- perhaps they acted to slowly to resolve their insolvency issue in time.

More moral hazards of the Wall Street business model explained here

- Edited for sloppy HTML

[Phillycat]

17. Great post.

Scared the crap out of me when that happened, what a horrible precedent that set.

[jimshoes]

10. Does any of this reflect back on cheney's assertion

that deficits don't matter? Or is this a totally different animal?

[ozymandius]

21. defecits = debt

The whole derivatives market is based on debt. Good debt. Bad debt. Betting on the chance that a company will default on its debt.

Debt matters.

While we're here, Lehman wallowed in $billions worth of debt.

[saigon68]

12. This whole mess is the fault of Chimpanzee Boosh

[Tandalayo_Scheisskopf]

13. Stop. It's Hammer Time.

Reposted from thread #1

CLV08.NYM Crude Oil Oct 08 95.58 9:32am ET Down 5.60 (5.53%)
HOV08.NYM Heating Oil Oct 08 2.7314 9:32am ET Down 0.2077 (7.07%)
NGV08.NYM Natural Gas Oct 08 7.181 9:32am ET Down 0.185 (2.51%)
PNV08.NYM Propane Gas Oct 08 1.565 8:56am ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.5725 9:33am ET Down 0.1971 (7.12%)

This promises to be a huge exposure of the extent of speculation in the energy markets today.

I propose that the DHS do something useful and watch all airports and ports for Wall Street Criminals trying to get their asses out of the country, first to the Caymans, to grab their booty, then to Paraguay or other countries without extradition treaties. I also propose that the US Government start preparing SpecOps teams to perform snatch and grab ops on the ones that do make it out, to bring them to Gitmo for tribunals for their economic destruction. Penalties should be severe, merciless and nauseatingly public. Perhaps Chinese investors who are getting reamed would like to revive that old standby: "Death by 1000 Cuts". I am sure Faux would pay well for the TV rights.

Treat them like the terrorists and enemies of the state that they are. The destruction they have wrought could only be dreamed of by an Afghan tribesman.

Oh, getting on Bloomberg's site is impossible. They are getting hammered.

[Wiley50]

23. These are times when it is extremely comforting to already be completely destitute

Good Luck Folks

See you at the food stamp office

[kineneb]

42. yup, know that one

Hi Wiley50 and friends-

I have been taking a mental health break from the news (mostly), but have still been following the financial mess. Hubby's death left me without an income, so I now have a food stamp card. I am hanging onto the house, because it is all I have left. Good luck to everyone else.

[Ghost Dog]

89. Yes. I didn't notice the late-seventies - early 'eighties slump at all,

although I was down-and-out in London collecting leftover fruit & veg off the street after the market closed, and sometimes shoplifting.

[ozymandius]

14. Banks Can Now Use Deposits to Fund Investment Banking Operations?

(re-post from original thread)

From a FT article:

The Fed also suspended rules that prohibit banks from using deposits to fund their investment banking subsidiaries.

Was this the quid pro quo for Band of America buying Merrill? If so, the repercussions extend beyond BofA. This is a time when the federal authorities need to be vigilant, not lax about banks taking risk with depostors' funds.

Note than many banking experts, post the S&L crisis and now, recommend the reverse, "narrow banking", which requires banks to invest depositors' funds only in the very safest assets. This is the exact opposite of the sort of regulatory measures needed to improve the health of the banking system. Expediency trumps soundness.

Any reader inputs appreciated.

http://www.nakedcapitalism.com/2008/09/banks-can-now-use-deposits-to-fund.html

[spotbird]

65. This is exactly how Lincoln Savings

(of Keating Five fame) failed.

Obama really should slam McCain on the issue. Not only did McCain help the bank to take the risks, McCain learned nothing about regulation in the process.

[rucky]

77. This seems like a reverse bank run.

Banks are making a run on their depositors.

[Buttercup McToots]

18. week of September 15 thru 19, some initial events are anticipated to occur

( I wanted to repost this...)

In all, 13 powerful shock wave events are suggested as possible

On the week of September 15 thru 19, some initial events are anticipated to occur.

In all, 13 powerful shock wave events are suggested as possible.

http://www.fxstreet.com/fundamental/economic-calendar /


Bolivia and Venezuela kicking out their US ambassadors
NATO ships in the Black Sea
China threatening to dump the US$
Saudis walking out on OPEC
Pakistan furious with the US
Hurricane Ike
Fanny &Freddie failure backlash
PMs crude crushed
Lehman Brothers?
WaMu?
Putin playing war games with Chavez
Palin threating Putin
Israel vs Iran

what else?

[depakid]

19. Switched on CNBC and they were all HOWLING for regulation!

Feels like a Lewis Carroll novel.

[RUMMYisFROSTED]

24. "Let's regulate the open barn door."

:grr:

[DemReadingDU]

28. Sure they call for regulations, now

Now that all the rich people have made zillions from all those toxic investments. Do they really care if things get regulated or not?

It's us little investors that are going to lose everything - our meager portfolios, our meager pensions, our meager social security.


:grr:

[Demeter]

151. Those Were Paper Zillions

and unless those "zillionaires" converted everything to tangibles, those zillions are going up in smoke as we speak.

The REALLY unlucky ones still owe taxes on them.

[DemReadingDU]

159. The super zillionaires

probably already did get the toxic zillions converted to tangibles. Or the toxic waste was traded for our good treasuries, or our pension funds were used to purchase the toxic waste. Somehow, I don't think there are going any toxic paper zillionaires. But I do think there are going to be a lot of paupers as their 401k deflates downward.

[Roland99]

97. At lunch, a crawl on CNBC showed regulators did not foresee *any* of this crisis

:wtf:


Every one of us here has been seeing it for YEARS!!


These guys knew. Oh they knew alright. But they kept shut so the raping of average investors could continue.

[TomClash]

20. Note how the S & P 500 and the NASDAQ . . .

. . . were much higher when Bill was President.

Look at the price of Gold and Oil.

This tells you what a shit economy we've had under Bush.

Keep spreading the message, Barack! IT'S THE ECONOMY STUPID!

[Pale Blue Dot]

25. The markets seem to be recovering.

:eyes:

Everything must be alright after all.

[UpInArms]

29. Market increases bets on a rate cut (tomorrow); bank watchers wait to see market reaction

http://www.marketwatch.com/news/story/fed-sets-emergency-steps-ease/story.aspx?guid=%7B71DBEE1F%2DDDD0%2D494C%2DA476%2D434842EF0753%7D&dist=hplatest

WASHINGTON (MarketWatch) -- With Wall Street scrambling to contain a financial crisis, the Federal Reserve on Monday assembled a series of emergency tools to head off panic, expanding its loan programs and accepting a broader range of collateral for its loans.

The initiatives, with commitments from the private sector as well, are designed "to mitigate the potential risks and disruptions to markets," Chairman Ben Bernanke said in a statement.

The focus was quickly turning to what the Fed would do at formal meeting on Tuesday, its regularly scheduled session. Prior to the weekend's dramatic events, Fed watchers were widely expecting the central bank to hold rates steady at 2%. But the extraordinary events have raised the possibility of a rate cut in many minds.

Paul Mortimer Lee, economist at BNP Paribas, said the Fed would either cut rates by a half-percentage point or signal that a rate cut could come soon.
"So, in short, they either talk dovish or act and talk dovish," Lee wrote in a research memo to clients.

<snip>

Interest-rate futures have jumped as the market showed signs it expects the Federal Reserve to reduce its benchmark rate at its meeting to 1.75% from 2%.

...more...

[depakid]

33. That would be big mistake at this point

[ozymandius]

52. This Bloomberg article talks about that.

Bernanke May Be Wrong: Next Rate Move Might Be Down (Update1)

Sept. 12 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and his fellow policy makers agreed at their August meeting that their next move on interest rates would probably be up. They may turn out to be wrong.

Inflation looks likely to ebb, thanks to falling commodity prices and contained labor costs. The U.S. economy, meanwhile, may be set to take another lurch down as consumer spending gives way and the credit crunch intensifies with the plunge in Lehman Brothers Holdings Inc.'s shares.

....

Bernanke and his colleagues are likely to hold their benchmark rate at 2 percent when they meet Sept. 16 and may keep it there until 2009, trading in federal funds futures indicates. Still, the odds of a rate cut by year-end have been growing. Futures trading shows more than a 40 percent chance of a December reduction, up from zero odds at the beginning of September.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aYFs3B5DZ36Y&refer=economy

[ozymandius]

63. Now this message from a brain I trust:

A Disasterous Rate Cut ?

Why on earth the FOMC would want to undue any of the work by Treasury with a rate cut?That is the current market bet, that a 25 or even 50 basis cut may occur at tomorrow's Fed meeting.

That would be ill advised.

We have survived the initial impact caused by the collapse of Lehman Brothers (LEH). AIG is certainly in trouble, as are Wachovia (WB) and Washington Mutual (WM) and others.

http://bigpicture.typepad.com/comments/2008/09/a-disasterous-r.html

bit more...

[depakid]

71. If they want to tank the dollar, hike oil prices and spur inflation

a rate cut would just the way to do it....

[EmeraldCityGrl]

26. Just my 2 cents.

I have a few modest stock market investments. Yes I've lost money, but I hope to God these stock market Republicans
are licking their wounds. Every time one of them bitches, I just smugly ask them who they voted for then add, "can you imagine if those
sons a bitches had your SS dollars?" Yep, the Bush years, you voted for him, reap the results right where it hurts.

[ozymandius]

46. Recent events should bury the SS piratization plan. Should - in a sane world.

McCain and his ilk were marketing this nonsense just this past March. Some still consider idiocy fashionable.

[Dr.Phool]

70. On the downside, some of our blue dogs are warming to the idea.

I heard Stinky Hoyer talking before the recess, that in the next Congress, they'll bring up "Social Security Reform". They're taking the words right out of Luntz' playbook.

[Ghost Dog]

113. SS will have to be piratized to pay to kick-start the next bubble:

War, more and more War. The traditional end-of-the-line.

[UpInArms]

27. Lehman folds with record $613 billion debt

http://www.marketwatch.com/news/story/lehman-folds-record-613-billion/story.aspx?guid=%7B2FE5AC05%2D597A%2D4E71%2DA2D5%2D9B9FCC290520%7D&dist=hplatest

NEW YORK (MarketWatch) -- Lehman Brothers Holdings is closing its doors with more than $600 billion of debt -- the biggest bankruptcy in U.S. history.

Lehman (LEH: 0.20, -3.45, -94.5%) has total debts of $613 billion against total assets of $639 billion, according to a filing prepared Sunday.

The previous largest bankruptcy was that of WorldCom Inc. in July 2002, which had $104 billion of assets.

The Chapter 11 Petition filing with the Bankruptcy Court of the Southern District of New York shows that Lehman has more than 100,000 creditors and more than $150 billion in outstanding bond debt.

"In the judgment of the Board, it is desirable and in the best interests of the Company, its creditors, employees, and other interested parties that a petition be filed by the Company seeking relief under the provisions of chapter 11 of ," said the filing, effectively ending Lehman's 158-year existence.

The filing also names Lehman's three largest stockholders: AXA (AXA: 28.94, -2.63, -8.3%), ClearBridge Advisors and FMR, parent of Fidelity Investments. Axa holds 7.3% of outstanding common stock, while ClearBridge holds 6.3% and FMR holds 5.9%. As of 8.45 a.m., shares of Lehman were down to 33 cents in pre-market trading; the stock closed just below $13 on Monday September 8.

The largest listed claimants of Lehman's debt were Citigroup Inc. (C: 16.94, -1.02, -5.7%) and Bank of New York Mellon Corp. (BK: 38.49, -1.46, -3.6%), which were the indentured trustees of about $138 billion of Lehman's senior notes.

...more...

[Tandalayo_Scheisskopf]

31. Will Fuld do a Bernie Ebbers...

And face prosecution and a long jail term?

Lord, I hope so.

[Renew Deal]

39. So what does that mean for Citigroup?

Did they lose all of the Lehman money? How much is that?

[progressive_realist]

83. Impossible to know at this point.

If enough is raised from the sale of assets, bondholders will get paid off fully. If the $$ falls short, they will get paid off at XX cents to the dollar. Either way, they get something, unlike shareholders who get zero. Which brings up the question I don't have an answer for -- does FMR being listed as a major shareholder mean that Fidelity mutual funds will be taking a hit from this, or is that an investment of Fidelity's own funds, separate from its mutual fund offerings?

[bemildred]

133. I gotta admit, 600 billion is impressive.

This sentence is good:

The largest listed claimants of Lehman's debt were Citigroup Inc. (C: 16.94, -1.02, -5.7%) and Bank of New York Mellon Corp. (BK: 38.49, -1.46, -3.6%), which were the indentured trustees of about $138 billion of Lehman's senior notes.


It's like watching a venereal disease spread.

[UpInArms]

30. PIEHOLE OPENS: Bush says has long run confidence in financial markets

11:01 a.m.
Bush says has long run confidence in financial markets

[Tansy_Gold]

35. Yeah, well, for a lot of us that "long run" started 40 years ago.

We're now looking at the "short run" that was supposed to be the successful end of the "long run."

How many of us at 50, 60, 70 have the wherewithal to absorb a complete loss of personal equity and rebound?

Are millions of us just going to be left to the wolves -- assuming Sarahcuda even leaves us them -- while the CEOs and hedge fund manager wallow in filthy lucre?


I could be really angry today.


Or I could just be


Tansy Gold

[kineneb]

44. long run...run out

How many of us at 50, 60, 70 have the wherewithal to absorb a complete loss of personal equity and rebound?

Uhhh, I don't. At 50, I am already there, through medical bankruptcy and loss of a spouse. I expect to live the rest of my life at a near-poverty level. I just arrived at this point earlier than others.

[Tansy_Gold]

50. I hear you, friend, I hear you.

Loss of spouse did it for me, too. I'm hanging on, at almost 60, but by the skin of my teeth. A bump in the road, however, is all it will take.

:hug:

[dixiegrrrrl]

86. So, ironically, Palin will save us

by killing all the wolves.

Which means we can't be thrown to them.


Oh happy day.....:bounce: :bounce: :bounce: :woohoo: :woohoo:

And I was so worried when I got up this morning...

:sarcasm:

[UpInArms]

38. more:

11:03 a.m.
Bush says short-run market adjustments can be painful

11:02 a.m.
Bush: White House focused on financial market adjustments

[ozymandius]

55. Maybe he'll toss some dimes at the press corps, tell 'em to buy some Lehman stock.

Lehman is at the bargain price of 19 cents/share.

[Haole Girl]

34. I hope all of those who re-elected this horrible admin are happy

:sarcasm:

[eowyn_of_rohan]

36. i'm sure those who stole it are

but I, too, hope the idiots who actually DID vote for him are finally waking up

[radfringe]

37. from the looks of poll numbers - the IDIOTS you did vote for him

want to continue things with mccain

[eowyn_of_rohan]

60. Who believes the polls in this country?

Though I know there are way too many IDIOTS in this country who will vote for the Bridge to Nowhere Party, I believe true preference HERE is closer to that of the rest of the world, which, according to the BBC, shows Obama is favored by a four-to-one margin across the 22,500 people polled in 22 countries. (49% preferred Obama, 12% for McCain, the rest said "other" or "makes no diff.")

[Buttercup McToots]

40. Off Topic...but this is weird...

http://goldismoney.info/forums/showthread.php?t=301156

I watch this MB often...some good articles and some strange shyte...
But this is weird...some guy got a robo call (PA) like from the
schools for early dismissial?
But he got this...
Massive Military Deployment?

--------------------------------------------------------------------------------

From time to time we receive prerecorded messages on our phone from our local school district.

Things like " School is closed on "such and such" date or early dismissal on "such and such" date or "snow delay today".


Tonight we received this message...


"Our school district has been informed of a massive military deployment on Tuesday September 16th...please join us in supporting the many families that will be affected by this..."


I have found nothing online or on TV regarding this - anybody hear anything?

anyone from that area get a call like this?
Read the thread...

Tuesday Sept 16th...
Don't want to be tin foil hat ish...but this are nervous times, I guess...
Opinions?
I guess his neighbors got the call also?

[ozymandius]

48. I haven't found anything alarming so far.

It's weird. But there's nothing on the wires at this hour that sounds tinfoil-hatty.

[quercus palustris]

69. saw this on another forum...

struck me as weird given your post.

"I work for the gov. in Harrisburg PA; our whole phone system just went down. "

[Buttercup McToots]

76. ???

Huh?

[Dr.Phool]

84. Probably remnants of Ike still playing havoc.

If you watched the Browns-Steelers game in Cleveland last night, it was played in 50 mph winds, gusting over 60, and driving rain.

Over 330,000 customers in the Cleveland area were without power, and a lot of downed trees.

It's had about enough time to reach Harrisburg, although God should have taken his wrath out on Pittsburgh instead.:evilgrin:

[ozymandius]

41. UBS shares hit by speculation of new writedowns

ZURICH (Reuters) - Shares in Swiss bank UBS AG took a new tumble on Monday, falling further than a hard-hit banking sector after reports it will have to write down another $5 billion on its risky investments in the second half of the year.

.....

Without quoting sources, Swiss paper Sonntags Zeitung said UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz), Europe's hardest hit bank in the financial market turmoil, would have to write down another $5 billion on its risky investments in the second half.

...

UBS announced last month writedowns had climbed a further $5 billion in the second quarter to top $42 billion, and said it was splitting the investment bank that had dragged it into the red from its core wealth management business.


http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLF66356420080915

[Ghost Dog]

134. UBS Investment Bank Options Shrink As Lehman Fails

ZURICH -- UBS AG (UBS) can no longer count the eventual sale of its troubled investment bank among its future options following the U.S. bank shakeout of the last few days, experts said Monday.

The Zurich-based bank is also likely to figure in renewed merger speculation because its shares are again slumping to price lows last seen in 1998, when it was formed through the merger of UBS and Swiss Bank Corp.

UBs' options shrank because the hurried sale of Merrill Lynch & Co. Inc. (MER) and the collapse of Lehman Brothers Holding Inc. (LEH) -- both of which hold similar mortgage assets to UBS -- show that investment banks are extremely unattractive targets, a former high-ranking UBS executive said.

"What many investors had been hoping for after UBs' recent shift in strategy -- separating the investment bank, and possibly even finding a buyer eventually -- has been completely discredited over the weekend," Markus Granziol, chairman of UBs' investment bank until 2002, said.

...

Despite last month preparing the groundwork for an eventual unit sale -- which UBS denies -- the bank will instead spend the next three to four years trimming its bloated balance sheet and reducing risky activities such as proprietary trading, or buying and selling securities on the bank's own book, Hoffmann-Becking said.

...

Meanwhile, analysts said the steep drop in UBS shares Monday raises the specter of a takeover of the Swiss bank, even if potential suitors are few.

"If UBS can't succeed in showing progress on several fronts with a favorable effect on its share price, then I think there are several potential suitors which would be interested," Bank Vontobel analyst Panagiotis Spiliopoulos said.

That puts UBS in a race against the clock to further trim risky positions of mortgage securities, which have caused four consecutive quarterly losses, shrink its balance sheet and stem withdrawals from wealthy clients, Spiliopoulos said. He rates UBS at buy with a CHF28 target.

To be sure, the disastrous state of many financials and UBS still relatively large market capitalization of over CHF60 billion means an imminent takeover is unlikely, other analysts said.

"If the shares keep falling they become more of a target, but the question is, what bank has the funds' to buy UBS, Javier Lodeiro, Zurich-based analyst with private bank Sal. Oppenheim said. Lodeiro rates UBS at neutral with a CHF36 target.

As UBS struggles with its mortgage woes, several potential suitors have been mentioned by analysts, including Deutsche Bank AG (DB) and British banks Barclays PLC and HSBC Holdings PLC (HBC).

...

Hometown rival Credit Suisse Group (CS), relatively unscathed by the mortgage turmoil, is seen as an unlikely bet because of the two are near-blueprints of each others' business. Credit Suisse has said repeatedly it shies away from major deals which would have a transforming effect, in favor of picking off business and bankers from troubled rivals.

Credit Suisse, Barclays and HSBC declined to comment.

/... http://www.djnewsplus.com/ge/article/SB122147644632523619.html?mod=p&a=Focus&h=UBS+Investment+Bank+Options+Shrink+As+Lehman+Fails

[Renew Deal]

45. AIG switched their incorporation to the Bahamas a few years ago?

I found this on a blog. Is this correct? If it is, then the fed certainly shouldn't touch them.

Dickeylee says...
Another thought on AIG, didn't they switch their incorporation to the Bahama's several years ago, to avoid taxes? And now they want a Fed loan?
http://economistsview.typepad.com/economistsview/2008/09/bankruptcy-for.html#c130699760

anne says...
Dickeylee:

Another thought on AIG, didn't they switch their incorporation to the Bahama's several years ago...?

Right.
http://economistsview.typepad.com/economistsview/2008/09/bankruptcy-for.html#c130700268

[ozymandius]

47. The SEC says that AIG is still incorporated in DE with a NY mailing address.

AMERICAN INTERNATIONAL GROUP INC (0000005272)
SIC: 6331 - FIRE, MARINE & CASUALTY INSURANCE
State location: NY | State of Inc.: DE | Fiscal Year End: 1231

Business Address
70 PINE ST
NEW YORK NY 10270
2127707000

Mailing Address
70 PINE STREET
NEW YORK NY 10270

[JNelson6563]

49. A couple of things

First and foremost I cannot tell you how much I have depended on this thread for info. I recently moved from Michigan to Montana and my cable is not hooked up yet. I only have my phone for internet/news. You Marketeers are the greatest. Ever.

In relation the the situation today, the 10 yr. yield has moved 19 basis points! That is huge.

It will be hard to look away from this train wreck.

Again, can't thank you all enough for all the great info and commentary. I would comment more often but using phone is a bit arduous.

Your grateful comrade in temporary exille,
Julie

[Hugin]

51. Today... We're all Marketeers!

To rip off an often ripped off cliche. :D

:yourock:

[ozymandius]

54. I am so glad that you've dropped by Julie.

Thank you for the lofty praise. Please accept my wishes that your stay in Montana provides you with great boons.

:hi:

[PassingFair]

142. WTF? We need you here!

You were anchoring Northern Michigan!

:(

[thewiseguy]

53. AIG is down 70%

[ozymandius]

56. Feds Right to Let Lehman Fail, But It's a 'Dangerous, Risky' Path, Roubini Says

After the nationalization of Fannie and Freddie last week and the government's role in JPMorgan's purchase of Bear Stearns in March, the notion of America as "bailout nation" has taken hold. This weekend, Treasury Secretary Hank Paulson sought to put an end to that way of thinking by declining to backstop a deal for Lehman Brothers.

.....

But the government has already started down a "dangerous and risky" policy road, which resumed this weekend as the Federal Reserve announced "enhancements" to existing liquidity facilities that were created in response to the ongoing crisis.

The announced changes include:

* Broadening of the types of securities Wall Street firms can use as collateral when borrowing from the Fed to include lower-grade debt securities and equities.
* Stepped up schedule of so-called TSLF auctions to a weekly vs. bi-weekly basis.
* Removal of restrictions on how much commercial banks can lend to their brokerage units.

This final point means that banks are using Federally insured deposits to support their brokerage units, which puts even greater risk on the Fed and (potentially) the FDIC, Roubini says.

http://finance.yahoo.com/tech-ticker/article/56803/Feds-Right-to-Let-Lehman-Fail-But-It%27s-a-%27Dangerous-Risky%27-Path-Roubini-Says?tickers=LEH,MER,BAC,FNM,AIG,C,JPM

[ozymandius]

58. Crisis on Wall Street: Roubini Predicts Another 20 Percent Stock Drop, Sale of Goldman, Morgan

After failing to find a buyer this weekend, Lehman Brothers filed for the largest bankruptcy in U.S. history while Merrill Lynch agreed to be acquired by Bank of America for $50 billion. Such extraordinary events set the stage for a wild Monday on Wall Street, and most likely beyond.

These incredible, once unthinkable developments have caught a lot of people off guard, but not Nouriel Roubini, of NYU's Stern School and RGE Monitor, whose alarming predictions about the housing market and finanical system have been coming to pass with alarming frequqency.

This morning, Roubini forecast another 20% drop in stock prices, and reiterated a prior view that there will be no major independent broker/dealers standing before this crisis ends. In other words, Goldman Sachs and Morgan Stanley should be seeking suitors today, or face a similar fate as Lehman later.

http://finance.yahoo.com/tech-ticker/article/56654/Crisis-on-Wall-Street-Roubini-Predicts-Another-20-Percent-Stock-Drop-Sale-of-Goldman-Morgan?tickers=LEH,MER,AIG,GS,MS,WM,XLF

---

For the record: if Roubini's predictions come true, a 20% decline in value is, by definition, a crash.

[Ghost Dog]

136. Worries Turn To Goldman, Morgan's 3Q Amid Turmoil

With Lehman Brothers Holdings Inc. (LEH) and Merrill Lynch & Co. (MER) mired in turmoil, shareholders are anxious to see what is to come from the other two big investment banks -- Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) -- when they report their fiscal third-quarter results.

The numbers won't be pretty, as analysts polled by Thomson Reuters are expecting Goldman to report a 72% plunge in earnings on Tuesday, while Morgan is projected to post a 44% drop Wednesday. The companies are seen posting write-downs of $1 billion to $2 billion each.

Still, enough of Goldman and Morgan Stanley's businesses are posting at least decent results to keep the two in the black for the latest fiscal quarter. That contrasts with a projected $3.9 billion quarterly loss and $7.8 billion in write-downs from Lehman.

But even if Goldman and Morgan Stanley look much better by comparison, their operating results are likely to show how much misery is in Wall Street's future more than a year into the credit crunch, as even the firms that were performing strongest are being badly hurt.

Until recently, Goldman had been known as having a magic touch after a correct bet that subprime mortgages would crater and its nimble avoidance of other messes. Morgan Stanley, on the other hand, did embarrass itself with some of its mortgage bets last year but had managed to soothe investors since then, as it scaled back on risky exposures.

/... http://www.djnewsplus.com/ge/article/SB122148493297523843.html?mod=q&a=Analysis&h=Worries+Turn+To+Goldman%2C+Morgan

[ozymandius]

62. I wonder about Goldman Sachs.

If GS were to find itself afflicted with the same frail financial underpinnings as Lehman did - would Paulson feel compelled to save his old firm?

[amandabeech]

67. The final point is exactly the type of problem that Glass-Steagal (sp)

was supposed to prevent. Looting people's savings to save the brokers.

It is another case of privatizing the rewards and socializing the risks.

[Dr.Phool]

73. That's the scariest thing they've done so far.

[progressive_realist]

85. Somebody edited the Wikipedia entry on Gramm-Leach-Bliley

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies and ruining the American economy ten years later. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services.

<end excerpt>

I added the bold, but the text is in the original.

:spray: :rofl: :rofl: :rofl:

[Dr.Phool]

101. Credit where credit is due!

[ozymandius]

117. Love it! Who did it? Prag? Ghost Dog? UpInArms?

Whoever it was - Thanks! :toast:

[Hugin]

121. Wasn't me...

Far too subtle.

Might have been one of the thousands, nay, MILLIONS of SMW surrogates who were born today. :)

:toast:

[ozymandius]

74. "the FDIC fund has about $50 billion to "insure" about $1 trillion in assets"

Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn't Act

With the "financial storm of the century" hitting financial institutions, many Americans are worried about the safety of their bank deposits. While the FDIC insures individual accounts up to $100,000, the reaction to IndyMac's failure this summer -- lines outside retail branches -- shows Americans have limited faith in the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000.

Such concerns are justified, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.

http://finance.yahoo.com/tech-ticker/article/56994/Top-Economist-Americans-Should-Worry-About-Bank-Deposits-if-Congress-Doesn%27t-Act?tickers=LEH,MER,BAC,AIG,WM,^DJI,^GSPC

[amandabeech]

162. The FDIC may encourage mergers between solvent and insolvent institutions.

FDIC (IIRC) often "encourages" mergers of wobbling banks with solvent ones.
The regulators keep it as quiet as possible, but the merger is inked after the close of business on a Friday and the troubled bank opens up under new ownership (and often with the name of the rescuing institution) on Monday.

Your deposits transfer automatically, and become part of the capital of a solvent bank.

In the SNL crisis, the Feds set up Resolution Trust Company, which would take some of the bad assets of failing SNLs in an inducement for solvent institutions to merge and take the deposits. RTC then sold off the non-performing assets in an orderly manner which avoided a real fire sale.

Poppy Bush also waived the $100,000 ceiling on insurance, but I don't think that will happen this time.

The upshot is that the FDIC will not be paying out on deposits from all failing banks, but may end up with some junk. My recollection is that insurance premiums went up at least until the fund was replenished and paid off any loans it received from the Feds along the way.

While it makes sense to investigate the health of your bank, and divide your cash among two or three institutions so that you will have immediate access to some of it should one institution fail, there is no need for panic over whether or not you will get your money back. Of course, those dollars may have lost ground against the Euro and Yen, which will make oil and your next vacation abroad more expensive, but they'll still buy some bread and bologna at the grocery store.

[Hugin]

57. ~Quarter-past Noon EMT: Ouch.

Dow 11,136.12 -285.87 (-2.50%)
Nasdaq 2,224.78 -36.49 (-1.61%)
S&P 500 1,222.63 -29.07 (-2.32%)

10y bond 3.53% -0.01 (-0.28%)

Some words: I've heard some speculation that it's not as bad as expected... However, during massive sell-offs (on which
there is no such thing as an expert due to the fact today is the biggest EVER!) Stock Prices actually rise a bit. Be careful, do not confuse PRICE with VALUE. This is one reason, I'm reluctant to look to stock indexes as 'health measures' on the economy as a whole.

[ozymandius]

61. NYSE & Nasdaq volume at 12:26

NYSE Volume 3,889,423,250
Nasdaq Volume 1,190,150,875

plus a bit o' blather

12:05 pm : Stocks are sharply lower after Lehman Brothers (LEH 0.16, -3.49) filed for bankruptcy, Merrill Lynch (MER 20.71, +3.66) agreed to sell itself to Bank of America (BAC 28.33, -16.03) and reports indicate that AIG (AIG 4.32, -7.82) is desperate for capital.

At midday stocks are approaching opening lows, although they are not down as much as feared. Weakness is broad-based, with all ten economic sectors posting a loss.

Lehman Brothers filed Chapter 11 bankruptcy protection after no buyers were willing to save the troubled 158-year-old firm due to a lack of a government backstop. None of Lehman's broker-dealer subsidiaries will be included in the bankruptcy and will continue to operate. Lehman listed $613 billion in debt, which is the largest bankruptcy on record according to reports.

Merrill Lynch agreed to be sold to Bank of America in an all-stock deal for $29 per share, or $50 billion, a 70.6% premium to Friday's closing level. BofA said it was willing to pay the premium because the benefits were appealing and it still believes it is a compelling price, noting there was the possibility that others were interested. According to the Wall Street Journal, the move came after federal officials "strongly encouraged" the sale due to concern that the firm was approaching failure. Fed officials may have encouraged the deal, although BofA CEO Lewis said there was no “pressure” from regulators.

Meanwhile, insurance giant AIG is making moves in an effort to survive. In an attempt to avoid a credit rating downgrade, AIG is planning to sell some of its most valuable assets, raise capital and reach out to the Fed, accord to the WSJ. Over the weekend, AIG turned down a capital infusion from a group of private equity firms because an option tied to the offer would have effectively given the private equity firms control of AIG, according to reports. AIG is down 64% this session.

The financial sector has plummeted 5.9%.

Crude prices are down a steep 4.3% to $96.79 per barrel, falling to their lowest level since February in the wake of the financial market turmoil and news that Hurricane Ike caused limited damage to production facilities.

Traders feel the collapse of Lehman and other troubled financial institutions may spur the FOMC to cut rates on Wednesday. Fed funds futures suggest a 58% chance of a 25 basis point rate cut, compared to no chance just one week ago.

The increased odds for a rate cut, and investor uncertainty has prompted a rally in Treasuries. The 10-year note is up 1-24/32, sending its yield down to 3.51% from 3.72%. Gold is up 2.1% as a result, although the dollar is only posting a slight loss of 0.1%.

In merger and acquisition news, shares of video game maker Take-Two Interactive (TTWO 16.44, -5.45) are down 25% after Electronic Arts (ERTS 44.18, -0.81) terminated its discussions to acquire Take-Two. In March, Take-Two rejected a $26.00 per share offer from Electronic Arts.

Walgreen (WAG 34.58, -1.49) offered to acquire Longs Drug Stores (LDG 76.22, +4.56) for $75 per share in cash, or $3 billion including the assumption of debt. The offer is $3.50 per share more than CVS Caremark's (CVS 36.47, -1.17) pending merger agreement to acquire Longs. Longs is reviewing the proposal.

In economic news, the latest industrial production reading was disappointing. The Federal Reserve said earlier this morning that industrial production fell 1.1% in August, which was much steeper than the expected decline of 0.3%. An 11.9% decline in auto output and a 3.2% decrease in utility output acted as major drags. Capacity fell by one percentage point to 78.7% (consensus 79.6%).

Industrial stocks are down 3.2%.DJ30 -311.51 NASDAQ -39.17 SP500 -32.16 NASDAQ Adv/Vol/Dec 589/886 mln/2156 NYSE Adv/Vol/Dec 216/622 mln/2606

[TrogL]

59. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2008-08-04 Monday, August 4 0.965717 USD
2008-08-05 Tuesday, August 5 0.959233 USD
2008-08-06 Wednesday, August 6 0.95511 USD
2008-08-07 Thursday, August 7 0.951475 USD
2008-08-08 Friday, August 8 0.936593 USD
2008-08-11 Monday, August 11 0.936944 USD
2008-08-12 Tuesday, August 12 0.939761 USD
2008-08-13 Wednesday, August 13 0.938262 USD
2008-08-14 Thursday, August 14 0.941531 USD
2008-08-15 Friday, August 15 0.942596 USD
2008-08-18 Monday, August 18 0.943129 USD
2008-08-19 Tuesday, August 19 0.942863 USD
2008-08-20 Wednesday, August 20 0.940999 USD
2008-08-21 Thursday, August 21 0.956572 USD
2008-08-22 Friday, August 22 0.956389 USD
2008-08-25 Monday, August 25 0.955749 USD
2008-08-26 Tuesday, August 26 0.953652 USD
2008-08-27 Wednesday, August 27 0.953925 USD
2008-08-28 Thursday, August 28 0.949938 USD
2008-08-29 Friday, August 29 0.949938 USD
2008-09-01 Monday, September 1 0.940645 USD
2008-09-02 Tuesday, September 2 0.934754 USD
2008-09-03 Wednesday, September 3 0.942507 USD
2008-09-04 Thursday, September 4 0.93985 USD
2008-09-05 Friday, September 5 0.940115 USD
2008-09-08 Monday, September 8 0.935104 USD
2008-09-09 Tuesday, September 9 0.936593 USD
2008-09-10 Wednesday, September 10 0.931532 USD
2008-09-11 Thursday, September 11 0.926183 USD
2008-09-12 Friday, September 12 0.942863 USD

Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9348 0.9366 0.9332 0.9363 -0.0068 -0.72% 
CD.U08 Sep 2008 0.9342 0.9342 0.9335 0.9342 -0.0087 -0.92% 
CD.Z08 Dec 2008 0.9340 0.9343 0.9305 0.9343 -0.0071 -0.75% 
CD.H09 Mar 2009 0.9519 0.9519 0.9519 0.9405 +0.0156 +1.66% 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9397 +0.0156 +1.66% 
CD.U09 Sep 2009 0.9350        0.9340 0.9390 +0.0157 +1.67% 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9383 +0.0158 +1.68%  

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.8669 0.8669 0.8669 0.8669 -0.0047 -0.54%   
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.79610 0.79650 0.79230 0.79245 -0.00355 -0.45%    
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 151.350 151.440 149.335 150.350 -2.715 -1.77%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.4178 1.4183 1.4178 1.4183 -0.0026 -0.18%   

Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

ThThe December Canadian Dollar was sharply lower overnight as it consolidated some of last Friday's rally. Stochastics and the RSI are neutral signaling that sideways trading is possible near-term. If December renews this summer's decline, monthly support crossing at 91.80 is the next downside target. Closes above the reaction high crossing at 95.91 are needed to confirm that a short-term low has been posted. First resistance is the overnight high crossing at 94.46. Second resistance is the reaction high crossing at 95.91. First support is last Thursday's low crossing at 92.22. Second support is monthly support crossing at 91.80.

Analysis

My apologies.

A great deal of what I've been posting about the Canadian banking industry and the impact of sub-zero and zero-down mortgages is wrong. Hence the uproar on the TSE, which was down 400 points two hours ago. :scared:

There was a link which I've misplaced showing the top 10 (or so) banks affected by the current crisis. The Canadian Imperial Bank of Commerce was #2. Another Canadian bank which should have known better (Bank of Montreal?) was in the top five. No other Canadian bank (including mine - known for its conservatism) was on the list.

Be that as it may, the CBC morning drive-in announced that zero-down 40-year mortgages would no longer be available after October 15th. I wasn't aware they were available at all. I've been saying they were illegal, but apparently I was wrong on that one.

What's worrying everybody in Canada's financial sector is how badly the Canadian financial institutions are linked to US banks. The same with Canadian industry. If you manufacturing (what's left of it) sector is toast, we can't sell our parts to you. If you've got no product to ship, your trucks are going to be sitting gather rust instead of burning our gasoline.

Being Loonie Watch, I supposed I should actually talk about the loonie. If the greenback goes south (bad pun) the loonie goes through the roof, making Canadian products unaffordable in greenback-based markets. Or we end up in the previous scenario where people park their cash in loonies waiting for the greenback to come back, given the Euro has lost a lost of its lustre and the Gold Bugs have driven metal to unreachable limits.

[TrogL]

144. Closing numbers etc.

Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct set time 
CD.Y$$ Cash     0.9348 0.9372 0.9332 0.9359 -0.0072 -0.76% 15:01 
CD.U08 Sep 2008 0.9342 0.9380 0.9335 0.9355 -0.0074 -0.79% set 14:19 
CD.Z08 Dec 2008 0.9340 0.9375 0.9305 0.9343 -0.0071 -0.75% set 14:19 
CD.H09 Mar 2009 0.9519 0.9519 0.9519 0.9336 -0.0069 -0.73% set 15:10 
CD.M09 Jun 2009 0.9880 0.9880 0.9880 0.9329 -0.0068 -0.72% set 15:10 
CD.U09 Sep 2009 0.9350        0.9340 0.9322 -0.0068 -0.72% set 15:10 
CD.Z09 Dec 2009 0.9845 0.9845 0.9845 0.9315 -0.0068 -0.72%  

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market          Open    High    Low     Last    Change   Pct 
AUSTRALIAN $/CANADIAN $ (CME:ACD)
ACD.U08 Sep 2008 0.8669 0.8669 0.8669 0.8669 -0.0047 -0.54% 
EURO/BRITISH POUND (NYBOT:GB)
GB.U08.E Sep 2008 (E) 0.79610 0.79650 0.79230 0.79290 +0.00045 +0.06%   
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.U08.E Sep 2008 (E) 151.350 151.440 149.335 150.130 -2.935 -1.92%     
EURO/US$ (SMALL) (NYBOT:EO)
EO.U08.E Sep 2008 (E) 1.4178 1.4183 1.4178 1.4177 -0.0032 -0.23%    

Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)



The December NASDAQ 100 closed sharply lower on Monday following the announced bankruptcy of Lehman Brother and the takeover of Merrill Lynch & co. by Bank of America. ...

The December S&P 500 index closed sharply lower on Monday and the financial world was rocked today on news of Lehman Brother's bankruptcy and Bank of America's takeover of Merrill Lynch & co. Additional pressure cam from concerns that AIG American International Group Inc., which is one of the stocks that make up the Dow Industrials could also be in severe financial trouble. Selling moderated after New York Gov. David Paterson said that the company would be allowed to access $20 billion of assets held by its subsidiaries in order to stay in business. Bank of America's takeover of Merrill Lynch & co. removes some of the worries about that company, which also allowed for a short covering rally off session lows. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that additional weakness is possible near-term. If December extends today's decline, weekly support crossing at 1172.00 is the next downside target. Closes above the 20-day moving average crossing at 1264.02 are needed to confirm that a short-term low has been posted. ...

The Dow closed down 504.48 points on Monday and below the previous reaction low crossing at 11,037 extending this month's decline. News of Lehman Brother's bankruptcy and Bank of America's takeover of Merrill Lynch & company sent the Dow into a tailspin. ...

The December Canadian Dollar closed higher on Monday and below the 10-day moving average crossing at 93.55 as it consolidated some of last Friday's rally. Stochastics and the RSI are diverging and are turning neutral to bullish signaling that sideways to higher prices are possible near-term. The mid-range close sets the stage for a steady opening on Tuesday. Closes above the reaction high crossing at 94.70 are needed to confirm that a low has been posted. If December extends this summer's decline, monthly support crossing at 91.80 is the next downside target. First resistance is today's high crossing at 94.46. Second resistance is the reaction high crossing at 94.70. First support is last Thursday's low crossing at 92.22. Second support is monthly support crossing at 91.80.


Analysis

I'd love to know what these guys are smoking - I want some. Compare the loonie blather to the numbers.

I'm surprised things didn't get all that bad in terms of the greenback's value. We'll see what happens overnight.

[Ghost Dog]

68. European shares fall 3.7 pct after Lehman failure

FRANKFURT, Sept 15 (Reuters) - European shares slid on Monday to their lowest close in two months, with financial stocks weighing heavily after U.S. investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) filed for bankruptcy protection.

The FTSEurofirst 300 index of top European shares ended unofficially with a loss of 3.7 percent at 1,119.47 points, its lowest close since July 16. Falling stocks led risers by about 10-to-one, according to Reuters data.

"With the financial crisis having scaled a new peak, the uncertainty among investors has increased strongly. An end to the volatility in the stock markets is not in sight," Landesbank Berlin said in a note. Banking stocksled the decline, with UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) suffering losses of between 7 and 19 percent.

"Lehman's collapse also increases concerns that other banks could fail," Global Insigtht said in a note.

Index heavyweight energy stocks such as Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), down 5 percent and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), down 4.4 percent, were hit by a steep fall in crude oil prices CLc1 LCOc1, which analysts linked partly to U.S. financial industry woes.

"The price of crude oil could continue to fall because the financial crisis in the U.S. has fuelled fears of an economic slowdown across the globe, which would be negative for crude oil as an economic good," Commerzbank said in a research note.

Economic growth concerns also pulled base metals prices lower, hurting shares in miners such as Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), down 6.6 percent, and BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), which fell 4.5 percent.

/. http://www.reuters.com/article/marketsNews/idCALF10687520080915?rpc=44


FTSE drops 3.9% as Lehman failure heightens fear

LONDON, Sept 15 (Reuters) - Britain's benchmark share index ended almost 4 percent lower on Monday as banks plunged after U.S. investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) filed for bankruptcy protection.

The FTSE 100 .FTSE dropped 212.5 points, or 3.9 percent, to 5,204.2 -- its biggest one-day percentage fall since Jan 21.

...

HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) dived 17.6 percent to 232.5 pence, an all-time low. It traded at more than 730 pence at the start of the year.

HBOS is more reliant for its funding on borrowing in the wholesale market than any other major UK bank and could face higher borrowing costs as a result of Lehman's collapse.

Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) lost between 3.3 and 10 percent.

Also in the financial sector, Friends Provident (FP.L: Quote, Profile, Research, Stock Buzz), Prudential (PRU.L: Quote, Profile, Research, Stock Buzz), hedge fund Man Group (EMG.L: Quote, Profile, Research, Stock Buzz) and the London Stock Exchange (LSE.L: Quote, Profile, Research, Stock Buzz) shed between 5.4 and 17.9 percent.

"It's taken us back down to the bottom end of this trading range and whacked off what the FTSE has gained in the last week," said David Scott, a senior stockbroker at Redmayne-Bentley on UK markets.

"It was inevitable, we knew there was going to be another big financial institution going to the wire -- the biggest thing about it all is that the Fed have said 'enough is enough, we're not throwing anymore tax payers money at it'."

...

BP (BP.L: Quote, Profile, Research, Stock Buzz) lost 3.6 percent, Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) fell 4.4 percent, while BG Group (BG.L: Quote, Profile, Research, Stock Buzz) lost 6.1 percent.

/... http://www.reuters.com/article/marketsNews/idCALF17350320080915?rpc=44&sp=true

[Buttercup McToots]

72. sorry...responding to above post...

*

[ozymandius]

75. What's on your mind Buttercup McToots? n/t

[spotbird]

78. China may cut its dollar holdings - CICC(China Daily)

China may cut its dollar holdings - CICC(China Daily)
Updated: 2008-09-12 07:32 PrintMailChina, which holds a fifth of its currency reserves in Fannie Mae and Freddie Mac debt, may cut the portion held in US dollars, according to China International Capital Corp (CICC), one of the nation's biggest investment banks.

http://www.chinadaily.com.cn/china/2008-09/12/content_7020656.htm

The link is from Friday, but it was news to me. Without China, how will we pay our bills?

[ozymandius]

80. So our credit's no good anymore at the pawn shop.

This is news to me too. The most direct impact that comes to mind over this development is the price of crap at Wal-Mart. That event could be followed by the price of everything else from everywhere if China follows through with their threat to dump dollar reserves.

[spotbird]

81. In the comments after that

article someone points out that if no one buys treasuries at current yields they'll have to increase rates.

It makes your head spin.

[ozymandius]

79. WaMu shares hit hard (22% loss)

NEW YORK (CNNMoney.com) -- Don't forget about Washington Mutual.

Concerned that Wall Street has done just that, the nation's largest savings-and-loan plummeted 22% in mid-day trading. Investors are concerned that potential sources of capital have disappeared in the upheaval this weekend on Wall Street that saw Lehman Brothers (LEH, Fortune 500) file the nation's largest bankruptcy and Bank of America (BAC, Fortune 500) scoop up Merrill Lynch (MER, Fortune 500).

Washington Mutual (WM, Fortune 500) shares were battered last week, losing 36% of their value as investors grew increasingly nervous that the bank didn't have enough capital to see it through the tsunami sweeping Wall Street.

After this weekend's turmoil, however, WaMu has fewer places to turn if it needs another injection of capital beyond the $7 billion it raised in April. No one stepped in to save Lehman and Bank of America will now be busy digesting Merrill.

http://money.cnn.com/2008/09/15/news/economy/wamu/?postversion=2008091513

[ozymandius]

82. State to Allow A.I.G. to Access $20 Billion in Subsidiary Assets

Updated, 1:03 p.m. | Gov. David A. Paterson announced today that the state will allow the embattled New York-based insurance giant A.I.G. to use its subsidiaries’ assets to provide a bridge loan to itself.

There was no credit or funds being extended by New York State; rather, this was a regulatory decision by the state’s insurance department, the governor emphasized at a noontime press conference, on a Monday that has already been a tumultuous day on Wall Street.

....

In the meantime, the governor specifically said that he has asked the state’s superintendent of insurance to provide authorization that A.I.G. can access $20 billion of assets through its subsidiaries to use as collateral to get cash for its day-to-day operations. “Hopefully we’ve cleared the way for the federal government and anyone else who could be of assistance here,” Governor Paterson said.

The governor blamed the complex financial instruments that have become the hallmark of Wall Street over the past decade. A.I.G. had become one of the biggest underwriters of complex debt securities known credit default swaps, used as insurance for a wide range of products, including the mortgage instruments that have been the bane of Wall Street for the past year and a half.

http://cityroom.blogs.nytimes.com/2008/09/15/state-to-allow-aig-to-access-20-billion-in-subsidary-assets/

[CountAllVotes]

87. just got a phone call from a gold broker

they wanted to know if I had any coins that I'd like to have evaluated and/or sell to them. I told them no. :wtf: is going on?

:kick:

[nadinbrzezinski]

88. Lets see if this crosses the 11K point

this is really bad...

And I wonder fi the breaks will come in

[Pale Blue Dot]

90. Looks like somebody let the stopper out.

I had a good day of teaching. I'm glad it took my mind off of this mess for a few hours.

[Roland99]

91. 3:18pm - DJIA -400!!

Dow 11,021.08 -400.91
Nasdaq 2,193.56 -67.71
S&P 500 1,205.66 -46.04
10-year 3.48% -0.25
Oil $96.69 -$4.49
Gold $787.00 $22.50

[nolabels]

92. Nope, still above 11,000

:shrug:

[Roland99]

93. Not anymore! Under 11,000!!

Dow 10,989.41 -432.58
Nasdaq 2,187.09 -74.18
S&P 500 1,201.71 -49.99

[nolabels]

137. MSNBC report "White House says no more bailouts on the way"

Or at least so they say
White House says no more bailouts on the way
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3490829


It kind of looks like the thing is about to blow, so they have closed up shop and are abandoning ship ahead of time

Watching it for years hover above the 11,000 and was figuring that was the tread water mark just like many. I was figuring they wouldn't let get that low before the election. Of course seeing how it's more of a gambling hall more than a actual good place to put money a few must now be squirreling away the greenback in some other place :shrug:

[nadinbrzezinski]

94. Under 11K... lord if it closes there... will be bad

[kickysnana]

95. To paraphrase Don Miguel "está cayendo, está cayendo, ha caído!" n/t

[Ghost Dog]

138. Sí. Cayó.

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=aprnwPJ%2Bteb%2FqWP%2B8tohNQ%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

September 15, 2008 10:18 ET (14:18 GMT)

[fascisthunter]

96. hurry up Republicans... you need a rally... 4 is approaching!!!

[Roland99]

98. You're getting it now. Nice 60-70pt positive jump...er...nearly 100pt jump up now!

[fascisthunter]

100. incredible aren't they..... 20 minutes....

can they make it???!!!!!!

[Dr.Phool]

99. Calling Dr. Howard, Dr. Fine, Dr. Howard.

PPT is on the way!

[nadinbrzezinski]

102. Ain't working, I think it will close under 400, perhaps under 11K as well

[Dr.Phool]

104. WOW! I guess not. Down 465

Now at 10,965.

[Roland99]

105. A nice little slap in the face from the PPT to the shorts.

[nadinbrzezinski]

106. Ain't this grand? Last night and today will be days to remember

[Roland99]

108. The Day The Lights Went Out (literally for me)

heh

Ike took out power to like 1/3 of Louisville. Could be a week to two weeks before some get power back.

[antigop]

103. Who will protect us from plunge protection?

http://en.epochtimes.com/n2/opinion/plunge-protection-team-4223.html

There are many experts who see this happening today as the markets plunge in value with banks going down and very little going up except prices, foreclosures, and unemployment.

Did you know that your government has machinery in place to deal with plunges? It was founded during the heady days of the Reagan Administration.

It was back in l987 when the former movie star in chief signed on to this Executive Order. The “Working Group” it set up was quickly labeled the Plunge Protection Team (PPT).

As the government in effect takes over mortgage giants and wrestles over what to do about the collapse of huge investment banks like Lehman Brothers, with more to come, you know they are on alert 24/7 scrambling to put more fingers in the dyke. (Over the past weekend, the Fed and Treasury Secretary warned the banks to clean up Lehman’s mess or they could be next. As of Sunday, there was no deal and one of American’s oldest investment banks faces liquidation.)

There is a mechanism in place to avoid this type of crisis. In theory! Here are their overt marching orders; the covert mission is still shadowy.

[NC_Nurse]

107. Good thing I just started my new job. Times like this it's great to be a nurse!

Phew!!!!

Too bad I'm still exposed in the market, though. At least I have real estate too.
If I was retiring tomorrow, I'd be throwing up right now. :-(

[nadinbrzezinski]

109. WOW... just WOW

10954

[Roland99]

110. Final settling won't bring this bloody mess above 11k.

[antigop]

111. Financial firms' credit defaults swaps spike on Lehman bankruptcy

http://financialweek.com/apps/pbcs.dll/article?AID=/20080915/REG/809159975/1036

The news of Lehman Brothers’ pending bankruptcy rippled across the credit default swap market Monday, sending the cost of default protection soaring for other financials.

It also set in motion the second massive CDS settlement in two weeks, with one analyst—Sandy Chen of Panmure Gordon—estimating there may be as much as $350 million in CDS contracts written on Lehman’s debt.

Most analysts estimate that protection buyers will collect 30 cents to 50 cents on the investment bank’s bonds, which plummeted in value over the weekend.

Lehman’s bankruptcy further highlights the potential stresses in the $62 trillion CDS market, just a week after the government takeover of Fannie Mae and Freddie Mac spurred what will likely be the largest CDS settlement in history, given the mortgage giants’ $1.4 trillion of debt outstanding.

Lehman’s settlement may shape up to be even more complicated, given the sizable role the investment bank plays in the CDS industry. Fitch Ratings last year said that Lehman was the seventh largest counterparty in the CDS market. Mr. Chen told Reuters on Monday that Lehman Brothers had $729 billion of notional derivatives contracts as of the end of May, with an estimated fair value of $16.6 billion.

[Roland99]

112. YIKES!!! Near 500pt drop

[Dr.Phool]

114. 504 now.

[dysfunctional press]

115. near...?try over 500 point drop. dow down 504.48 at the close.

yikes!! is right. 4.42%

[Roland99]

116. At the close - Biggest Point Drop since Sept. 2001

Dow 10,918.00 -503.99
Nasdaq 2,179.91 -81.36
S&P 500 1,193.53 -58.17
10-year 3.48% -0.25
Oil $95.71 -$5.47
Gold $787.00 $22.50


DJIA under 11,000.
NASDAQ under 2,200.
S&P 500 under 1,200.

:scared:

[ozymandius]

131. blather's here

Monday market an extremely ugly session on Wall Street, with the S&P 500 falling 4.7% -- marking the largest one-day percent drop since the first session following the attacks on September 11, 2001.

Losses were driven by severe turmoil in the financial sector –- Lehman Brothers (LEH 0.21, -3.44) filed for bankruptcy, Merrill Lynch (MER 17.06, +0.01) sold itself to Bank of America (BAC 26.55, -7.19) and AIG (AIG 54.76, -7.38) is looking for a massive amount of cash in an attempt to stave off failure.

The S&P 500 closed at its lowest level since 2005 and is now down 18.8% year-to-date and down 24.3% from its October 2007 all-time high.

The financial sector (-10.4%) took the brunt of the selling interest, although weakness was broad-based with all ten economic sectors posting a loss. Decliners outpaced advancers by a whopping 81-to-1 ratio on the NYSE. Volume was heavy, with 1.83 billion shares exchanging hands on the NYSE.

Lehman Brothers filed Chapter 11 bankruptcy protection after no buyers were willing to save the troubled 158-year-old firm due to a lack of a government backstop. None of Lehman's broker-dealer subsidiaries will be included in the bankruptcy and will continue to operate. Lehman listed $613 billion in debt, which is the largest bankruptcy on record according to reports.

Respected analyst Meredith Whitney said on CNBC that Lehman's large blance balance sheet will need to be liquidated swiftly, which will drive the prices of assets lower across the board. In turn, financial companies will hold assets that are not worth as much, leading to further write-downs, Whitney said.

Merrill Lynch agreed to be sold to Bank of America in an all-stock deal for $29 per share, or $50 billion, a 70.6% premium to Friday's closing level. BofA said it was willing to pay the premium because the benefits were appealing and it still believes it is a compelling price, noting there was the possibility that others were interested. According to The Wall Street Journal, the move came after federal officials "strongly encouraged" the sale due to concern that the firm was approaching failure. Fed officials may have encouraged the deal, although BofA CEO Lewis said there was no "pressure" from regulators.

Insurance giant AIG is planning to make several moves in an attempt to stave off a credit rating downgrade and possible failure, including selling some of its most valuable assets and raising capital, according to The Wall Street Journal. The company was in talks with the Fed to borrow as much as $40 billion. But a late session Wall Street Journal report said the Fed will not be lending money to AIG, but is instead asking Goldman Sachs (GS 135.50, -18.71) and JPMorgan Chase (JPM 37.00, -4.17) to lead a consortium of banks to make from $70 billion to $75 billion available to AIG.

The idea that the Fed believes AIG needs even more than the $40 billion originally asked for unsettled the market, sparking a late-session decline that sent the financial sector and the broader market to settle at session lows.

The financial market turmoil sparked a rally in Treasuries, with the 10-year note spiking more than two and a half points, sending its yield down to 3.41% from 3.74%. In addition, traders bid up the price of fed funds futures for Tuesday's FOMC meeting, which now suggest an 80% chance of a 25 basis point cut to 1.75%, compared to no chance one week ago.

Commodities (-3.3%) saw a steep sell-off, with energy related names falling the most. Gasoline (-8.2%), crude oil (-7.8% at $94.06) and heating oil (-5.9%) got clipped. Gold (+3.4%) managed to gain, as investors flocked to the precious metal’s perceived safety.

The latest industrial production reading was a disappointment. According to the Federal Reserve, industrial production fell 1.1% in August, which was much steeper than the expected decline of 0.3%. An 11.9% decline in auto output and a 3.2% decrease in utility output acted as major drags. Capacity fell by one percentage point to 78.7% (consensus 79.6%).

[Dr.Phool]

118. Nasdaq below 2200. S&P below 1200. Dow below 11,000.

We're one clunk to the magic number.

But Magoo said this morning that the fundamentals were still strong at all his houses.

[JNelson6563]

119. Those closing numbers are breathtaking!

I expect they're stacking up the bodies to prepare for tomorrow's onslaught of barbarian hordes, ala 300.

May we all survive these dark days.

Julie

[depakid]

129. That late dive looks like "someone's" bucking for an unwise Fed rate cut

as opposed to "normal" market or computer trading activity.

[specimenfred1984]

120. I thought everything was wonderful in our perfect "free markets", LOL.

Oh, there is that nasty little 30 straight years of corruption thingy that's culminated in hedge funds and the gov't stealing every last cent they can. Oh well, Greenspan says it's just a little faux pas that'll pass and never return again so we can all rest easy. Plus, Chimpleton said the economy is strong so you know it's true!

[Dr.Phool]

122. Who wants to bet on a nice sucker rally tomorrow?

There are still fools and their money to be parted.

[Hugin]

124. They'll try to ramrod the Dow back over the 11,000 PISL...

TPTB can't allow the unwashed masses to be correct.

It undermines their 'authority'.

[Karenina]

130. Isn't Triple Witching Friday this week?

I do believe so...

[Theres-a]

160. Yes. nt

[Pale Blue Dot]

128. I wouldn't put money on it, but I don't think so.

My fearless prediction is that the sucker rallies are over for the foreseeable future.

The next few days should be VERY interesting, however.

[Demeter]

152. Rally With What?

Prag's gum wrappers aren't official currency yet. No, I don't think so.

I'm doubtful that the PPT will even show up tomorrow. Maybe Wednesday.

[harun]

123. Free as in .... free fallin (n/t)

[Hugin]

125. And (just in the nick-of-time) is the SMW Theme for this dark day...

"Free Falling" as performed by Tom Petty and The Heartbreakers.

"Shes a good girl, loves her momma
Loves jesus and america too
Shes a good girl, crazy bout elvis
Loves horses and her boyfriend too

Its a long day living in reseda
Theres a freeway runnin through the yard
And Im a bad boy cause I dont even miss her
Im a bad boy for breakin her heart

And Im free, free fallin
Yeah Im free, free fallin

All the vampires walkin through the valley
Move west down ventura boulevard
And all the bad boys are standing in the shadows
A ll the good girls are home with broken hearts

And Im free, free fallin
Yeah Im free, free fallin
Free fallin, now Im free fallin, now im
Free fallin, now Im free fallin, now im

I wanna glide down over mulholland
I wanna write her name in the sky
Gonna free fall out into nothin
Gonna leave this world for a while

And Im free, free fallin
Yeah Im free, free fallin"

http://www.lyricsfreak.com/t/tom+petty/free+fallin_20138478.html

[specimenfred1984]

126. I remember when I used to complain about corruption...

and was told "that's just the way it is" and 99.9% of people I spoke to couldn't have cared less or better yet, cited bullshit propaganda saying everything was just fine.

We Americans live in an extremely dumbed-down culture of self-deluded citizen-bots and there's very little that can be done about it in a short period of time. It's going to take years to fix not only our financial system but the entire American system as well.

[radfringe]

127. wonder how this will effect the overseas markets?

and what that will do to our markets tomorrow...

some gains tomorrow as the vultures swoop in, or another race to the bottom?

[ozymandius]

132. It's a good time to scour the econ blogs to see who's on death watch.

Morgan Stanley and WaMu look like prey.

[Ghost Dog]

143. Most of Asia was closed Monday, so has yet to take the fall. n/t

[RUMMYisFROSTED]

135. Thank God Chimp came out and spoke today on the economy!

:rofl:

[fedsron2us]

139. Is it time to panic yet ?

[TrogL]

140. Somebody who should have known better was blathering about people's money

...not being safe in the banks. (Treasury Secretary Hank Paulson )

I'm surprised we didn't see a classic "run on the banks" scenario right out of "It's a Wonderful Life".

[depakid]

141. You're not going to see that

What we're finding out right now is where the bodies are buried with respect to running up the housing bubble.

People knew there were bodies there- they stank long ago. Now we find out where they are and give 'em a proper burial.

[Ghost Dog]

145. UPDATE: Central Banks Boost Liquidity On Lehman Lending Fears

Mon, Sep 15 2008, 19:33 GMT
http://www.djnewswires.com/eu

UPDATE: Central Banks Boost Liquidity On Lehman Lending Fears

By William L. Watts

LONDON (Dow Jones) -- Fears that the collapse of Lehman Brothers could cause worried banks to freeze lending to each other and customers prompted major central banks to aggressively add liquidity to money markets Monday.

Monday's unscheduled actions came as overnight lending rates rose, indicating tensions in the interbank lending market.

Overnight euro-zone interest rates ranged from 4.43% to 4.48% Monday, The Wall Street Journal Europe reported, well above the ECB's 4.25% target rate. Overnight sterling rates were seen at 5.20% to 5.30%, compared to the Bank of England's 5% target rate.

The U.S. dollar overnight rate shot up 96 basis points to 3.11%, Bloomberg News reported.

The Lehman collapse and fears of further turmoil in financial markets also sparked a global flight to quality, weighing on equities around the world, particularly bank stocks, as investors and traders rushed into safe-haven assets such as the Japanese yen and government bonds, particularly U.S. Treasurys.

"The financial system now faces the unprecedented challenge of absorbing the unwinding of a major broker," warned Marco Annunziata, global chief economist at UniCredit. "If it works, it should boost considerably the hopes that the global financial system can work itself out of the year-long crisis. But the risk is enormous."

Analysts said banks are likely to stash cash amid worries about the aftermath of the Lehman collapse and the potential for further turmoil to come.

"There are obvious fears that money market spreads will rise as institutions once more resort to liquidity hoarding," said Peter Dixon, strategist at Commerzbank. "Counterparty risk is very much going to be the market theme for the coming weeks."

The U.S. Federal Reserve got the ball rolling after U.S. Treasury-led efforts to find a buyer for Lehman (LEH) failed. The Fed announced it was expanding its lending program and would also accept a wider array of collateral, including equities, for loans. At the same time, private banks were putting together a $70 billion liquidity fund.

The Bank of England provided 5 billion pounds ($8.9 billion) in extra liquidity to money markets through a three-day loan, and released a statement saying the move was "in response to conditions in the short-term money markets this morning."

"Along with other central banks, the Bank of England is closely monitoring market conditions," the statement said.

The Frankfurt-based European Central Bank added 30 billion euros ($42.5 billion) in a one-day money-market auction. Earlier, the ECB said it was monitoring money-market conditions and stood ready to ensure "orderly" markets. And ECB President Jean-Claude Trichet told reporters in Frankfurt that the bank was paying very close attention to developments.

"We have to be extraordinarily alert, we have to be permanently alert. It is an ongoing correction, with episodes of high levels of volatility," Trichet said, according to Reuters.

The Swiss National Bank and the Reserve Bank of Australia were also seen injecting liquidity into money markets on Monday.

Also Monday, China's central bank announced it was cutting its key lending rate by 27 basis points. Economists at Danske Bank said the move signaled that the Chinese government has moved its emphasis from fighting inflation to promoting domestic growth.

In addition to worries about banks' exposure to Lehman Brothers in the United States and Europe, Lehman's collapse also increases fears that other banks could fail, said Howard Archer, chief European economist at Global Insight.

"As a result, banks are likely to become even more reluctant to lend to each other, thereby increasing the risk that the credit crunch will deepen and last for some considerable time to come," Archer said in a research note.

...

"The bigger picture is that after a second successive weekend of emergency meetings, the financial crisis shows no sign of abating," said Julian Jessop, chief European economist at Capital Economics. "The authorities and the stronger players may be able to do enough to prevent the worst-case scenario of a complete meltdown. But as we have argued before, the second worst scenario - a prolonged credit crunch against a backdrop of deteriorating economic fundamentals - is still pretty awful."

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=7fc1d297-f543-43b2-bcf1-fa807c9194ea

[Ghost Dog]

150. FACTBOX: Possible global measures to ease financial stress

LONDON (Reuters) - Central banks mobilized worldwide on Monday to reassure plummeting financial markets frightened by the bankruptcy filing of Lehman Brothers and sale of Merrill Lynch -- Wall Street giants which many people once considered too big to fail.

But the latest series of measures announced by the likes of the U.S. Federal Reserve, the European Central Bank and the Bank of England were seen as national or regional firefighting rather than any agreed initiative by the world's monetary authorities to tackle the deepening global banking crisis.

...

As calls grow for a more coordinated approach to shore up confidence in banks and financial markets around the globe, following is a list of measures that could possibly be taken by authorities from either the Group of Seven most industrialized countries or central banks under the auspices of the Bank for International Settlements.

1) Emergency meeting of international policymakers at either G7 or G10 central banking levels and joint statement of intent to act together to support the global financial system.

...

2) Coordinated interest rate cuts from the world's major central banks to ease both the hiatus on lending markets as well as the pervasive economic fallout from the crunch.

...

3) Synchronized additions of short-term lending to stressed banks to ensure sound banks everywhere have adequate access to funding while trust is rebuilt.

...

4) Specific additions of dollar liquidity to ease intense demand for dollars outside the United States and a boost to cross-border currency swap agreements between central banks.

...

5) International support for banks under pressure via centralized funds or formal agreements on how to deal with the workout of any insolvency among global banking firms.

...

/... http://www.reuters.com/article/marketsNews/idINLF19975620080915?rpc=44&sp=true

So no mention of clapping the guilty parties in irons there yet, I see... :(

[Demeter]

157. Clapping In Irons Can't Be Announced Before Capture

Hell, they haven't even empaneled a grand jury yet....these things must be handled delicately, to prevent flight of the birds...

[Tandalayo_Scheisskopf]

147. Latest from The Kasino Bar.

Where you can be sure that EVERYONE is pie-eyed and droolin'.

CLV08.NYM Crude Oil Oct 08 94.10 4:40pm ET Down 7.08 (7.00%)
HOV08.NYM Heating Oil Oct 08 2.752 4:40pm ET Down 0.1871 (6.37%)
NGV08.NYM Natural Gas Oct 08 7.32 4:35pm ET Down 0.046 (0.62%)<--== 1.
PNV08.NYM Propane Gas Oct 08 1.565 5:01pm ET 0.00 (0.00%)
RBV08.NYM RBOB Gasoline Oct 08 2.545 4:40pm ET Down 0.2246 (8.11%)

1. Word is that there is some "concern" that Ike will impede the building up of NG stocks, heading into winter.

These guys cannot stop themselves.

[bemildred]

148. The price of NG has already tanked a bunch, and it shows signs of

resisting further decline. It was over $13 IIRC not that long ago. A %50 drop is not to be sneezed at unless you think Peak Oil is bullshit. And as you note, Winter is on the way.

[Ghost Dog]

149. "Real Economy" Reports (from SMW thread #1):

08:30 NY Empire State Index Sep
Briefing.com NA
Consensus 1.4
Prior 2.8

09:15 Capacity Utilization Aug
Briefing.com 79.6%
Consensus 79.6%
Prior 79.9%

09:15 Industrial Production Aug
Briefing.com -0.3%
Consensus -0.3%
Prior 0.2%

...

02. U.S. Aug. manufacturing output falls 1%
9:15 AM ET, Sep 15, 2008

03. U.S. Aug. capacity utilization falls to 78.7%, 4-year low
9:15 AM ET, Sep 15, 2008

04. U.S. Aug. motor vehicle output plunges 11.9%
9:15 AM ET, Sep 15, 2008

05. U.S. Aug. industrial production falls 1.1%, most in 3 years
9:15 AM ET, Sep 15, 2008

06. U.S. Aug. industrial production falls 1.1% vs -0.3% expected
9:15 AM ET, Sep 15, 2008

...


24. U.S. Sept. Empire State index falls to -7.4
8:34 AM ET, Sep 15, 2008


Heavy, already.

[54anickel]

154. Shattering Glass-Steagall

http://www.newsweek.com/id/159092

Aside from signaling the end of an era for Lehman Brothers and Merrill Lynch, this weekend's activity definitively drew a line at the end of another historical era: the Age of Glass-Steagall.

The Glass-Steagall Act is the Depression-era law that separated commercial and investment banking. It was functionally repealed in 1998, when Travelers (the parent company of Salomon Smith Barney) acquired Citicorp. And it was officially repealed in 1999. But recent events on Wall Street-the failure or sale of three of the five largest independent investment banks-have effectively turned back the clock to the 1920s, when investment banks and commercial banks cohabited under the same corporate umbrella.

Glass-Steagall was one of the many necessary measures taken by Franklin Delano Roosevelt and the Democratic Congress to deal with the Great Depression. Crudely speaking, in the 1920s commercial banks (the types that took deposits, made construction loans, etc.) recklessly plunged into the bull market, making margin loans, underwriting new issues and investment pools, and trading stocks. When the bubble popped in 1929, exposure to Wall Street helped drag down the commercial banks. In the absence of deposit insurance and other backstops, the results were devastating. Wall Street's failure helped destroy Main Street.

The policy response was to erect a wall between investment banking and commercial banking. It outlasted the Berlin Wall by a few decades. In the 1990s, as another bull market took hold, momentum built to overturn Glass-Steagall. Commercial banks were eager to get into high-margin businesses like underwriting hot tech stocks. Brokerage firms saw commercial banks, with their massive customer bases, as great distribution channels for stocks, mutual funds, and other financial products that they created. Generally speaking, the investment banks were the aggressors. In April 1998, Sandy Weill's Travelers, which owned Salomon Smith Barney, merged with Citicorp. The following year, Congress passed and President Clinton signed the Financial Services Modernization Act of 1999, known as the Gramm-Leach-Bliley Act. This law effectively deleted the prohibition on commercial banks owning investment banks and vice versa.

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Information Regarding the Gramm-Leach-Bliley Act of 1999 ----
http://banking.senate.gov/conf/

[Pale Blue Dot]

155. Futures dropping like a stone again.

Dow futures are down almost 50 pts.

http://www.bloomberg.com/markets/stocks/futures.html

[Roland99]

156. The last several big drops have been followed by

down futures and an early drop but then a sucker rally

[Pale Blue Dot]

158. Futures now down 106 pts.

I'm just sayin'... :D

[Roland99]

163. They're positive now!

[Roland99]

164. Just like clockwork....Just like clockwork.

[Dr.Phool]

161. Bloodbath starting in Asia

Hang Seng down 6%

Nikkei down 5%